One of the most pressing questions seniors and their families have is how will I pay for home care services? This question cannot be answered easily, as there are a number of individualized factors that play into the financial plan for long term care. One way to pay is long term care insurance. According to the American Association for Long Term Care Insurance, approximately 8.1 Million Americans have long-term care insurance policies. Many do not know how or when to utilize them to pay for services.
Some facts about long term care insurance policies:
- Most Long term care insurance can be used to pay for assisted living, nursing homes or in home care.
- These policies cannot be purchased at the time of need, and most require medical underwriting.
- Client using the services must pay for the services first, then are reimbursed by the policy.
- To open a claim, a screening has to be done by a licensed health care practitioner (HCP). In most cases, the client must require assistance with 2/6 Activities of Daily Living, and in some cases of advanced cognitive impairments requiring constant supervision.
It can be helpful for a client to choose a home care provider first, before opening the claim, for a few reasons:
- Some LTC companies will send their own contracted HCP to certify the eligibility, but many will accept ours, saving you a step.
- Almost all policies have a waiting period that is not reimbursed and they often require that the client is already receiving qualified services.
- They often will request verification of the agency’s credentials (licensing insurance etc).
- We may be able to conduct or at least assist with the eligibility screening.
- Some home care companies will potentially bill the insurance directly through Assignment of Benefits, meaning the client will not have to handle all of the paperwork themselves.
Policies will have a maximum daily, monthly, and/or lifetime benefit. It is important to find out up front what those limits are so that you can plan your budget for home care services accordingly.
In the absence of LTC Insurance, all Custodial Home Care Services are out of pocket. This is where qualified Financial Planners become such a valuable resource for those who are planning to fund their long term care with cash. We encourage our clients to work closely with their Financial Planner, Estate Planner, Insurance Agent, Banker and their family/support system to map out a plan, including what their desired long term care needs looks like, and the associated costs. It is always best to plan for the worst case scenario, for example if someone has a chronic progressive illness they may require significantly more care in the future than they do now.
About the Author: Pam Reynolds, CMC is the President and co-owner of Allegiance Aging Care Services. Pam has spent almost fifteen years working in senior care including long term care facilities and home health care. Her higher education is in Social Work, and she has been credentialed as both a certified Geriatric Care Manager and Licensed Assisted Living Administrator. Read more about Pam and her team of Aging Care Professionals here.